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posted by mrpg on Saturday December 30 2017, @07:45AM   Printer-friendly
from the nobody-thinks-of-the-dogs dept.

Trump targets Amazon in call for postal service to hike prices

U.S. President Donald Trump targeted Amazon on Friday in a call for the country's postal service to raise prices of shipments in order to recoup costs, picking another fight with the online retail giant he has criticized in the past. "Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!" Trump wrote on Twitter.

The U.S. Postal Service, which runs at a big loss, is an independent agency within the federal government and does not receive tax dollars for operating expenses, according to its website. The organization makes up a significant portion of the $1.4 trillion U.S. delivery industry. Other players include United Parcel Service Inc and Fedex Corp.

[...] Amazon has shown interest in the past in shifting into its own delivery service. In 2015, the company spent $11.5 billion on shipping, 46 percent of its total operating expenses that year. In October, Bloomberg reported that Amazon was testing its own delivery service to move products more quickly out of its overcrowded warehouses and make more of them available for free two-day delivery. However, Amazon said at the time that it was using the same carrier partners to offer the program as it has used for years, including the U.S. Postal Service, UPS and FedEx.


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  • (Score: 1) by khallow on Sunday December 31 2017, @03:59AM

    by khallow (3766) Subscriber Badge on Sunday December 31 2017, @03:59AM (#616060) Journal

    The only reason the Post Office is reporting an annual Loss is because the US, Republican Congress passed a law requiring them to pre-pay the retirement benefits for 75-years, in 10-years. This created a massive, unique financial debt.

    Let us recall that this accounting change happened because the USPS had huge unfunded retirement fund [cnbc.com] liabilities. It was not in profit years ago as a result. Here's a defense of the practice:

    LL: The Postal unions are urging Congress to allow the Postal Service to stop making these prefunding payments. What would happen?

    Chairman Issa: The Postal Service's unfunded liabilities will soar to around $100 billion by the end of the decade. This will reverse hard-won progress. The unfunded obligations will be 25% higher than they were before the Postal Service started its prefunding payments.

    With declining revenue, this huge unfunded liability would be a burden that the Postal Service could not afford to bear.

    LL: So bottom line, the unions claim of the postal service pre-funding pensions for future workers is false?

    Chairman Issa: Absolutely false. The non-partisan Congressional Research Service recently found that pre-funding requirements match Congress’ intent when they were enacted in 2006. The intent is to ensure that the growing unfunded liability for retiree health care for current employees is covered. These employees negotiated for and earned these benefits with their work, so USPS should pay for them.

    Sure, it is a Republican politician defending the practice. But you seem to have completely missed the stated reason for the law. You then wrote:

    If you imposed the same operational, financial / retirement requirements on Us Post Office as are on large private enterprises with pensions, it would generally be making an annual net-profit.

    While the private world has played similar games with pension funds, an valid accounting would include unfunded pension liabilities as liabilities on the books. It's very easy to show profits when one ignores liabilities. This commonly results in spectacular failures in the private world (such as the decline of auto and airline businesses in the US, who both have substantial problems with retirement fund liabilities).